A five-month temporary licence is not financially feasible, says Ithuba
- The National Lotteries Commission wants to change a court order from earlier this month, which limits the length of the temporary lottery licence, awarded to Ithuba Lottery, to five months.
- Ithuba Lottery has told the NLC that this is not financially feasible and it will make a loss.
- But Wina Njalo, an unsuccessful bidder for the lottery licence, is opposing the NLC's application, claiming that the NLC is once again favouring Ithuba.
The National Lotteries Commission (NLC) says that unless the Gauteng High Court changes its recent order that a temporary licence to run the national lottery may only be granted for five months, lottery sales will stop from 1 June.
The temporary licence, which will start on 1 June, is set to be awarded to Ithuba Lottery, a "sister company" of Ithuba Holdings, the current lottery operator whose licence expires on 31 May.
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But Ithuba Lottery has said it will not be financially feasible to only run the licence for five months. And Siyakhaya Holdings, which was announced as the successful bidder to take over from Ithuba after the temporary licence expires, needs at least nine months to prepare, according to an affidavit by NLC chairperson Barney Pityana.
"These facts place the NLC in an impossible situation," said Pityana. "If the court does not come to its assistance and extend the suspension period, there will be no lottery operations for at least nine months, from 1 June 2025."
The NLC's urgent application to change the court order will be heard in court on Thursday.
Trade and Industry Minister Parks Tau wanted the temporary licence to last from 1 June 2025 to 31 May 2026, after which Siyakhaya's new eight-year licence would kick in.
But Judge Sulet Potterill ruled earlier this month that issuing a temporary licence is unconstitutional and that the bidding process favoured Ithuba Lottery, because it is the only bidder with the infrastructure to keep the lottery running at such short notice. But she suspended the order, allowing the temporary licence to run for five months before the next licence holder takes over.
In court papers, Pityana said that unless the court order is changed, "irreparable harm" will be brought to the Lottery and the "good causes" that it funds. Pityana said R1.79-billion in good cause funding will be lost.
"It is important that finality be reached in the award of a temporary licence," he said. He said more litigation on the lottery licence is expected.
But one of the unsuccessful bidders for the lottery licence, Wina Njalo, which launched the initial court proceedings, is opposing the NLC's application.
Wina Njalo CEO Dawid Muller said the application, which seeks a "dramatic revision" of a "carefully crafted" judgment by Judge Potterill, was an "abuse".
Muller said that the NLC was taking a shortcut by rushing to court and that the "right time to seek any adjustment -- with proper evidence adduced in support -- would be at or near the end of that court-directed period".
He added that the NLC's actions "have all the hallmarks of seeking to favour the Ithuba companies, which Judge Potterill found to be unlawful".
Muller said Ithuba Lottery was not entitled to insist on making a profit. If it had indeed refused to operate the temporary licence, the minister had remedies, including imposing penalties, calling up security or blacklisting it.
He said Wina Njalo had only been given one day to prepare its opposition to the urgent application when, on its own version, the NLC had not fully disclosed its dealings with Ithuba Lottery to Judge Potterill.
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He said the NLC was now seeking to "relitigate" the same issues.
"They are not permitted to rewarm their arguments which have already been dismissed," he said. "The facts are not new. They were simply not pleaded by the NLC or Ithuba Lottery before Judge Potterill."
Muller said this would result in huge profits for the Ithuba Group, which had already previously been given a two year extension of the third licence.
He also said it was common cause that the National Lottery Distribution Trust Fund had significant reserves -- R2.2-billion -- to continue paying beneficiaries should the Lottery have to shut down for a short time.
In a statement on Wednesday, Trade and Industry Minister Parks Tau said he is "seeking legal advice with a view to appealing against the judgment's findings and orders".
